Accurate scan data is gaining new importance as retailers and wholesalers examine buying trends more closely and explore new Efficient Consumer Response-driven initiatives like computer-assisted ordering.
Such sophisticated strategies and a greater reliance on automation demands that scan data integrity be at the highest levels possible.
Good scan data also provides the foundation for planogram programs and trade promotion reimbursement procedures, and can lend insight into targeted marketing strategies.
"If retailers are using inaccurate data, they're going to have major problems," said one executive. "They can't make the right decisions when they're basing them on information that lacks integrity."
Another retailer, who intends to use scan data to develop planograms and for price modeling, stressed the importance of accuracy. Although his company's stores have been using scanning technology for more than 10 years, he noted, "You never really know how accurate your data is until you begin to rely on it to be very precise."
Most retailers said they were planning to expand use of scanning data and were committed to achieving high levels of accuracy.
Here's what they had to say:
Ray Ahlgren
director of retail technology Supervalu Minneapolis
Category management is one of the major focuses in our company right now, and two of the programs we're looking into rely very heavily on accurate scanning data. The first uses the data to create planograms designed to show the most optimal use of shelf space, and the second program uses the data for price modeling.
Although we've always stressed the importance of accurate data, you never really know how accurate your data is until you begin relying on it to be very precise. These two programs do just that, and once they're implemented, they'll drive scan data accuracy.
Although we're not using computer-assisted ordering, one of the chains in our corporate store group is considering such a move. I wouldn't be surprised if they begin testing a program a year or two down the road, and once that happens, I can see a ripple effect occurring throughout the other corporate chains.
We haven't disabled the quantity key in our corporate stores, and the stores we service make their own choice in that area. We did conduct a study several years ago, however, that showed there was no productivity lost when every item was scanned as opposed to liberal use of the quantity key.
David Kufeldt
MIS manager, small systems Pay Less Supermarkets Anderson, Ind.
Scan data accuracy is very, very important to us. Why? Because we're starting to roll out computer-assisted ordering, which requires accurate data to be successful.
We're slowly bringing all of our vendors on line. Right now about one-third of our stores is on line with computer-assisted ordering, and about 70% should be on line by the end of 1995. That's our goal.
We're also very heavily involved in frequent shopper programs, which is another reason we place such a high priority on scan data accuracy. The program's discounts, which usually range from 5 cents to $1 off products, are often reimbursed by product manufacturers who rely on scan data information. They feel that it's verified information.
There's a number of things we do to ensure the accuracy of our data. We require manufacturer bar codes on almost everything we carry, and we don't allow our cashiers to use the quantity key.
Each of stores tries to maintain accuracy by checking each new product to see if the bar codes read as they're supposed to.
Warren Sawyer
president Future Foods Mechanic Falls, Maine
The future of the supermarket industry will definitely be built upon the use of scanning data, which makes its accuracy very important.
If retailers are using inaccurate data, they're going to have major problems. They can't make the right decisions when they're basing them on information that lacks integrity.
The degree to which a company relies on scanning data depends a lot on its size. Large companies can realize tremendous benefits from such data, but smaller companies such as ours should balance their efforts with the system's paybacks.
It's a very labor-intensive task to generate and interpret detailed scanning data. There's so much information you can get lost in the paperwork. There's a point where generating and interpreting the data becomes counterproductive.
In our case, we probably make use of about half the capabilities available to us. We track individual product sales and use the information on customer traffic flow to create our labor schedules.
Accurate scanning data is also very important for computer-assisted ordering, and although we have the capability of ordering by computer, I don't expect us to switch over to that type of ordering for another three to five years.
Richard Jamison
director, data processing Seessel Holdings Memphis, Tenn.
Scan data accuracy is important to us. We use it to track sales information and find out what's selling and what's not. We give items 13 weeks to prove themselves, and if they're not selling by that time, we usually discontinue them.
We also provide scan data to our vendors to determine the paybacks we've earned from selling products and to create planograms. In the past 18 months we've seen an increase in the number of vendors who will create planograms for us, based on our scanning data.
We follow several practices to improve our scan data accuracy. For example, we transmit all weekly price changes from our central computer to our individual stores to save time and avoid errors. All price changes are checked on store shelves by employees using handheld scanners.
Lee Thompsen
store systems manager Associated Grocers Seattle
Scan data accuracy is becoming more and more important. We're very committed to helping the stores we service attain the highest possible levels of accuracy.
The scanning data from the various stores are fed into our central computer and used in software packages designed to improve category management and promotional planning.
We're also planning to start a program in the next two to three months that tracks pricing and sales histories for various items, starting at the point at which they were ordered.
We're not currently using computer-assisted ordering, but we're definitely taking a look at it, and I think it's just a matter of time before we're using it.
Several months ago we started a program aimed at emphasizing the importance of accurate scan data to the stores we service. We've been holding meetings with individual stores, focusing on such issues as training employees to avoid abusing the quantity key, reporting not-on-files in a timely fashion, and using [price look-up] codes correctly.
Herb Butler
manager, information systems Gregerson's Foods Gadsden, Ala.
We believe that accurate scanning data is very important, and although we haven't analyzed our own degree of accuracy, I believe it's rather high. I expect we'll use scan data much more extensively in the future.
Right now we use it mainly to keep track of products to qualify for money-back rebates from manufacturers. We're also considering a targeted marketing program that would rely on the scanning data generated from our frequent shopper program.
